The Kiwi dollar opens higher this morning as dairy prices hit 5th consecutive rise.
Dairy Prices Rise in GDT Auction
The NZD surged higher on last night’s dairy auctions which saw the Global Dairy Trade index climbing 1.7%, with an average selling price of USD3,481 per tonne. The Whole Milk Power Index rose 2.2%, at an average selling price of USD3,321 per tonne and Skim Milk Powder increased by 3.3% at an average selling price of USD3,017 per tonne. The rise in dairy prices has been largely supported by a weaker NZD.
RBA saw case for November Rate Cut
The Reserve Bank of Australia released the minutes of their latest monetary policy meeting yesterday and showed the central bank had considered easing rates in November for the fourth time this year, instead policy makers chose to hold, siting further easing would harm investors and confidence. The board “agreed a case could be made for another cut” to the already record low 0.75% cash rate, given weakness in wage growth and inflation. The AUD dipped on the announcement.
Trump Threatens to Raise Tariffs
US President Donald Trump told US officials he would “raise tariffs even higher” on Chinese products if no deal is reached with China to end the trade war. Trump also said that he had a good relationship with China, noting that China was “moving along”. However, commented he would need to see a deal he likes from China to make a deal. Markets await details of the partial trade deal to be signed along with the venue and date, which was originally scheduled earlier this month, however was cancelled due to unrest in Chile. Unclear is when and how much tariffs will be reduced and how much US agricultural products China agrees to buy.
Focus now turns to the Fed minutes released tomorrow morning at 8am, which should reconfirm the Fed are comfortable holding for now.
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